BALANCE SHEET OF ALFA AND BETA as at 31st March 2013
Liabilities
Assets
Provision for Doubtful Debts 40,000
Cash 1,000,000
Workmen's Compensation
Sundry Debtors 800,000
Reserve 56,000
Stock 200,000
Outstanding Expenses 30,000
Machinery 386,000
Creditors 300,000
Profit and Loss A/c 40,000
Capitals: Alfa 500,000 Beta 600,000 1,100,000
Total Liabilities 1,526,000
Total Assets 1,526,000
Gama was admitted to the firm on the following terms:
Gama will bring in 400,000 as his share of capital, but he was unable to bring any amount for goodwill.
The new profit sharing ratio between Alfa, Beta, and Gama will be 3:2.
Claim on account of workmen compensation was 30,000.
To write off bad debts amounting to 40,000.
A liability of 20,000 included in creditors is not likely to arise.
Outstanding expenses to be brought down to 12,000.
20,000 to be provided for an unforeseen liability.
Goodwill of the firm was valued at 180,000.
Prepare Revaluation Account, Capital Accounts of Partners, and the opening Balance Sheet of the new firm.